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Actionable news in JCP: J.C. PENNEY COMPANY Inc,

One Reason J.C. Penney (JCP) Stock Is Falling

NEW YORK (TheStreet) -- J.C. Penney (JCP - Get Report) stock is slumping by 5.06% to $9.30 in late afternoon trading on Wednesday, after Citigroup initiated coverage on the stock with a 'sell' rating.

The firm set a price target of $7 on the stock.

J.C. Penney's management faces the difficult task of rebounding from a failed strategy with insufficient cash flow, and any improvement the company does see in operating cash flow will be negated by increases in capital expenditures, Citigroup analysts said in a note, Barron's reports.

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The firm mentioned five factors that are weighing on the stock, such as "self-inflicted wounds," lagging e-commerce, likely "elusive" free cash flow in upcoming years, inefficient sales productivity and "aggressive" theoretical paths to achieving J.C. Penney's 2017 goals, Barron's notes.

Citigroup analysts initiated coverage on 20 retail stocks last night, and department store J.C. Penney was at the bottom of their...